Category: The Business End

The bad boys of brewing recently sold a 22% stake of their company to an investment firm. So?

First, I have a terrible confession to make. Remember when John Lydon made those butter ads? I’m afraid I was partly responsible for that.

It wasn’t my idea or anything like that, but in my role as a planner I was responsible for putting together the research among butter buyers to find out who the best celebrity would be to front the campaign. It was one of the last freelance planning jobs I did before being able to switch to writing and beer consultancy full time.

We tested Lydon against a bunch of other people, and he came out top among Britain’s housewives because they felt he was so uncompromising, he’d never just do an ad for the money – he’d only do it if he genuinely believed what he was saying.

In other words, he was the best person to do what we were paying him to do, because he would never do what we were paying him to do, so if he did that, it’s OK.

Predictably Lydon got some stick for ‘selling out’. Because this is Johnny Rotten we’re talking about, he didn’t give a shit. Where he deigned to give a response, he said that punk was always about grabbing the filthy lucre from the big guys, and that’s exactly what he was doing here.

(If you ever tire of arguing about the definition of craft beer, head over to music and have a go at defining punk. As I witnessed last year at an event to mark punk’s 40th anniversary, it makes craft beer look simple.)

So I’ve witnessed a similar situation before to the one this week where BrewDog announced they were selling a chunk of the company to TSG Investment Partners in San Francisco – the same people who also help finance Vitaminwater, popchips and US beer brand Pabst – and were greeted with cries of ‘sell out!’

I can’t get too excited one way or the other about this.

Firstly, it’s hardly surprising, is it? BrewDog has been on an astonishing growth spurt for ten years. It already has 44 bars around the world and exports to 55 countries, and has double or even triple digit growth every year. The company has always been about rapid expansion, and this is a logical next step, which, if it has any lesson at all, is that, as Martyn Cornell has written, crowdfunding can only get you so far.

Second, BrewDog is maturing. Being ‘punk’ makes perfect sense when you arrive and overturn all the tables in the temple of beer, but they’re ten years old now, and that’s ancient in craft beer years. Martin Dickie and James Watt are in their mid-thirties with young families, and they employ, at the last count, about 450 people. A couple of years ago they did a re-brand that ever so subtly made them look and feel more grown up, less brash.

Before

After

BrewDog stopped being ‘punk’ when they grew into a stable, successful business that supports hundreds of people’s livelihoods instead of putting their foot through the mash tun and throwing the fermenters into a swimming pool before overdosing on End of History in a seedy hotel room. Behind the image and the increasingly infrequent brash stunts, they employ marketers, PR people, accountants, HR managers as well as brewers who all know what they’re doing, because you can’t function as a large business if you don’t. That doesn’t sound very punk, does it?

Thirdly, James Watt individually still owns more of the company than the investment firm he’s sold a chunk of his business to. If you insist on going by the US definition of craft beer, the sold stake is less than the threshold that disqualifies BrewDog from being craft.

I doubt anyone can be truly surprised by this move. I’d be amazed if anyone was genuinely upset by it. I think any outcry is merely the satisfaction of being able to say, ‘I told you so.’

I was shocked late Friday night to see a really good beer ad from Budweiser. No, stop laughing. I’ve seen plenty of good ads from Bud before – stuff about frogs and lizards and whazaaap, but this was a good beer ad: it’s true, it’s centred on the product, and it says something good about the broader beer category – good lager takes time to mature.

Last I heard, Budweiser is matured for twenty days. That’s not as long as the classic lagers of the Czech Republic and Germany are matured, but it’s a hell of a lot longer than the 72 hours some leading brands allegedly spend in the brewery between mashing in and packaging. You may not like the (lack of) taste in Budweiser, but even now they do some things right, and deserve some credit for that. So I was pleased to see an ad that had made lager maturation look cool.

I said as much on Twitter and Facebook, and very quickly Simon George of Budweiser Budvar UK shot back that his new strategy is to focus on the Czech beer’s astonishingly long lagering time – five times longer than the American beer. Budweiser Budvar has been running this copy for about nine months, albeit without the huge TV ad budgets US Bud can afford:

The dispute between American Budweiser and Czech Budweiser Budvar is decades old. Bud founder Adolphus Busch told a court of law, on record, in 1894: “The idea was simple,” he testified, “to produce a beer of the same quality, colour and taste as the beer produced in Budejovice [the Czech name for the town known as Budweis in German] or Bohemia.” Even though that record exists, the company has since flatly denied that this it stole the name Budweiser from the town of Budweis, or even took any inspiration from there. (There’s a lot more on this dispute in my book Three Sheets to the Wind.)

Budvar spent a long time capitalising on its David V Goliath relationship with Budweiser and has recently decided to move on and focus on its ageing process instead, as part of a new strategy to remain relevant in a market where craft beer means drinkers are more interested in product specifics. But it seems Budweiser are still hung up on their namesake. Nine months after Czech Budvar focused their marketing campaign on how long it takes to make their beer, American Budweiser focused their marketing campaign on how long it takes to make their beer:

Having stolen the idea, they’ve now gone the whole hog and even stolen the same copy. The Budvar headline above? ‘You can’t rush perfection.’ Spot the difference in the Facebook link to the ad below.

Come on, Budweiser. You’ve already stolen your name from the town in which Budweiser Budvar is brewed. You’ve copied their advertising idea (albiet in a fine execution) and now even their copy, word for word. You employ some of the best and most expensive advertising agencies in the world (even if you do try to shaft them on costs.) Is this the best those agencies can do?